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2016 (5) TMI 1567 - ITAT DELHIBenefit of exemption u/s 11 & 12 - whether activities of the trust were not within the purview of section 2(15) - As per revenue assessee society’s main source of receipts is from Hostel/Canteen activities and booking of Auditorium and Conference Hall which are of commercial nature - CIT(A) where relying upon the order of the ITAT for 2009-10 A.Y. and taking note of the fact that there was a similar denial in 2010-11 A.Y. also on identical fact which issue also stood concluded in favour of the assessee - HELD THAT:- We have seen the material available on record and in the light of the submissions advanced by the parties and on consideration of the above finding, we find that the conclusion drawn by the CIT(A) relying upon the order of the ITAT cannot be faulted with. It is seen that in 2009-10 A.Y. more or less on identical facts, the AO had proceeded on an Inspector’s report and therein also relying upon the information in Form 26AS as in the year under consideration he relying on the transactions made with non-member concluded that the trust was running as a commercial activity. This similarity of fact in the earlier year would be evident from order of the ITAT as held it would not be possible to ascertain the amount of canteen collection from those persons who were not stayed in the hostel. In any case it is bound to be very negligible and within permissible limits of section 2(15) of the Income Tax Act. It can be seen from the documents submitted that the trust serves buffet meals during the program / workshop conducted by Members Organizations and/or during own program and workshop but not for any other purposes. This can be reviewed form the related documents enclosed herewith for your kind perusal i.e. Bills of buffets served during workshop and seminars. We also like to submit that for the booking of the facilities (Buffet, Auditorium, Conference Hall etc.) of the Trust, officials of the trust designated for the said purposes (at the rank of Manager) are only authorized. Hence, as regard the remarks made by our Canteen staff they had merely given the information in regard to tariff rate both for vegetarian and non vegetarian buffets arrangement. There is nothing wrong in what has been stated by them and no where they had committed that it will be served also for the purposes other than the objectives of the activities for which it was intended. They had merely answered a query. Therefore, it would be inappropriate to conclude that what they had stated involve commercial activities. Thus identical claim of the Revenue has been considered by the ITAT. No change in fact or circumstance has either been referred to by the Ld. Sr. DR nor has been brought out in the assessment order. In the absence of any infirmity having been pointed out, we find no good reason to deviate from the view taken. Holding the conclusion of the CIT(A) in relying thereon justified on facts and law the departmental ground is dismissed. Depreciation claim - As relying on Indraprastha Cancer Society [2014 (11) TMI 733 - DELHI HIGH COURT] in computing the income of a charitable institution/trust, depreciation of assets owned by the trust/institution is a necessary deduction on commercial principles. The Gujarat High Court, after referring to the judgements of the Karnataka, Maharashtra and Madhya Pradesh High Courts cited above, also came to the same conclusion and held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. Revenue appeal dismissed.
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